A s. 90(2) distribution is made at the time of payment

Subject to exceptions, s. 90(2) deems a pro rata "distribution made" by a foreign affiliate to be a dividend.  CRA considers that a distribution is not made until it is paid (including payment by note issued in satisfaction of the distribution), so that there is no distribution at the time of declaration of the distribution.  This aligns deemed dividend recognition under s. 90(2), with that under s. 90(1) respecting the payment of what is a dividend under general corporate principles (see Banner Pharmacaps).

Neal Armstrong.  Summaries of 17 June 2014 T.I. 2013-0506731E5 under s. 90(2) and s. 128.1(1).